There’s a new ecommerce site in Kenya, Rachel’s Bargain Corner which claims to be the “complete online shopping experience in Kenya”. With such a bold title, reminding me of Amazon.com’s initial bravado, I’ve interviewed its founder Rachel Essendi, to find out more about its history and future:
Wizard of the CrowHow did the Rachel’s Bargain Corner idea come about?
Rachel: Partly due to difficulty in getting employment and the thrill of trying out something new. I did a course in biomedical science and technology in university and completed the same in August 2007, I worked a bit in a laboratory before quitting but a job in the research agencies was not forthcoming and so i decided to start a business on my own, my husband who happens to be a partner in the business was for the idea also and he pledged to support me through out especially on the technical side of things.
What business capital (cash, connections, etc) did you need to get it started?
Rachel: In terms of cash we dint need much this was due to the fact that we are still based at home and all the technical work was done by my business partner Enock, while I worked to get and maintain the business connections and relations.
We started the business with the bare minimums including two laptops that Enock owned but decided to use in the business, one laptop started as the one hosting the payment engine and also served as our Internet proxy server and it was running on a Linux OS, and the other laptop we used to do our day to day work.
Was the Rachel’s Bargain Corner site designed and coded in Kenya?
Rachel: The whole site and the associated support applications including the payment engine and the order management system were coded in Kenya by my business partner Enock. He has experience in system development having had short stints with two software development houses in the country. He hold a Bsc in Computer Science from Egerton University Kenya and he graduated in April 2007. He took some time off in April to work on the site and had it up and running beginning July this year. Enock is still doing the maintenance and further development of the site.
We choose to host our web site through a local hosting company that has very good terms and we started with a GPRS modem to provide for the internet connectivity.
After the VoteHow do you market an eCommerce site in a country that has low (5-10%?) Internet penetration?
Rachel: I’ve always believed that if you create a service that is useful to people, they will go all the way to try and access it. our target marketing avenues so far has been the print media and word of mouth – this is due to our limited budget when it comes to marketing and thus we are targeting any news outlets to create awareness about our presence and so far we have got the two leading media houses do our story.
Through the publishers that we started with we got some connections to media people and that enabled us to present our story to be put in one of the leading daily newspaper the Nation and has also enabled us to appear on a local Televison program called Zinduka aired on one of the leading broadcasters in the country Citizen TV.
We have also been sending out mails to the media trying to see if they can help us in creating awareness through out the country concerning online shopping and the benefits that comes with it. With the fiber optic cable landing in the country we are hoping to introduce the idea to the ministry of communication who have been spearheading the move to have young people come up with applications and content relevant to the local market to see if they will also help in creating the awareness throughout the country.
Our model is very much future oriented, and we are counting on the arrival of the fiber optic cable in the country to lower the internet charges, still we are looking at a secondary market raising from this, in that individuals will set up online trading cafes all over the country where people who can’t access internet can come and do their shopping, and also have kind of online shopping bureaus where the bureaus come in to aid people to shop online. I believe that if we have service that will provide efficiencies to people around the country then the same individuals will find ways of getting the same service.
Who do you see as competitors? And do traditional book stores see you as competition?
Rachel: The online shopping business in Kenya is still at an infant stage, I have so far come across only one online bookstore, but the owner has a brick and mortar store and he only sells books found in his store online, the other online shopping sites in the country try to sell every thing and so far none has been successful on a large scale when it comes to capturing the whole nation, and also none of the other shopping sites have an automated payment engine that integrates Zap and Mpesa. Our payment engine has set us apart from all the other shopping sites in the country.
So in terms of online competition for books and music there is no competition as such since at Rachel’s Bargain Corner we stock books from all local publishers and independent book sellers in the country and so far we have the biggest collection of books online to choose from in the country, and so far no one else is doing that in the country and no one else has implemented an integrated payment engine in their shopping sites.
Traditional bookstores really don’t see us as competition, at least not for now – we are infact working with 3 of the biggest brick and mortar bookstores in the country. We don’t deal with the books we have first hand, we do not even keep stock, Rachel’s Bargain Corner is more of a marketplace where we place books and music from different suppliers for sale online. we only keep stock of the used books.
In fact the booksellers we are working with see us more as complementing their business.
Hazina Ya KiswahiliWhat’s your turnover/gross sales and profit margin? Do you break even yet?
Rachel: We are only three months old and the response we have received so far is amazing, our profit margins per book are not much this is because we do free shipments for the same. we are awaiting to reconcile our figures at least after the first six months, this we believe will give us a clear financial picture, but so far each book takes care of its logistics in that the discount the publishers and book sellers give us are just enough to cater for the shipment and the associated logistics.
We have based our model on volumes keeping in account the economies of scale that result from a larger market especially when it comes to shipment costs. So far we are doing between 10 to 20 orders per day and so far we have not been forced to dig back in our pockets to cater for the expenses.
You offer direct delivery and post office. How reliable and fast do you find post office delivery?
Rachel: Contrary to speculations about the inefficiencies of the post office, we have found it to be very efficient and affordable, a book sent through the post office takes about two days to reach the destination at least to all the major cities and towns in the country. All the deliveries so far have reached their recipients in good condition and on time. We give usually give a period of one week for the post office delivery to reach its destination but so far we are noticing an average period of two days, that is from the time we place the book in the post office. The actual receiving of the book will depend on how frequently the individual checks their postal box.
How would someone who doesn’t have a listed home address receive a shipment?
Rachel: That is one of the challenge that we are facing for the individuals who are not in our selected areas for direct deliveries and don’t have a listed postal address. we are looking at the local couriers services, but we are still finalizing some issues especially relating to cost. The postal office also has a courier service that does not require one to have a postal address – we are looking into those alternatives to cater for that particular market segment.
But majority of Kenyans have either a listed postal address or they can use the postal address of their work place or their church. so far we have not encountered such an issue.
What new product lines do you how to bring on soon?
Rachel: We are monitoring the market for the time being just to gauge the response and the direction its taking – our immediate product line that we are looking forward to adding are office and school stationery and cosmetics and we hope to have this by the end of the year, but this will be driven by the direction the market will take in the following two to three months. This is guided by the requests we are getting from people around the country.
We want to have a bigger market and since a bigger part of the country has access to mobile phones we are looking at ways to incorporate ordering of books via mobile phone SMS.
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